One in Four Adults Has Opened an ISA... Number of Account Holders Surpasses 10 Million

[Financial News] The number of ISA account holders has surpassed 10 million, 10 years and five months after the account was introduced.
According to the Korea Financial Investment Association on the 29th, the number of ISA account holders stood at 10.05 million as of the end of last month. Total account balances reached 76.5 trillion won.
The milestone was reached about 10 years and five months after the ISA was introduced in March 2016. Given that South Korea's adult population aged 19 and older is approximately 44.07 million, this means that one in four adults, or 22.7%, holds an ISA.
The number of account holders has risen sharply this year. After surpassing 8 million at the end of January, it exceeded 10 million just seven months later. Over the same period, total account balances surged from approximately 55 trillion won to 77 trillion won. The increase is attributed to growing demand for ISAs, which allow investors to manage various financial products, including deposits, funds and stocks, in a single account while receiving tax benefits, amid increased participation in the stock market fueled by a market boom.
By type, brokerage-type ISAs, in which account holders directly select, invest in and manage financial products, accounted for 8.975 million holders, or 89.3% of the total. Trust-type ISAs, in which trustees such as banks and securities firms manage customized products according to the account holder's instructions, had 922,000 holders, or 9.2%. Discretionary ISAs, in which asset management professionals manage funds based on model portfolios offered by securities firms and banks, had 152,000 holders, or 1.5%.

As brokerage-type ISAs, which can be opened only through securities firms, gained popularity, securities firms had the largest number of account holders at 9.005 million, or 89.6% of the total. Banks, which mainly handle trust-type ISAs centered on deposits and installment savings, had 1.045 million account holders, or 10.4%. This was about 60% of the 1.783 million recorded at the end of 2020.
Exchange-traded funds (ETFs) accounted for 50.8% of the assets managed through brokerage-type ISAs, followed by stocks at 36.1%. Deposits and installment savings represented the largest share of trust-type ISAs at 88.2%, while funds accounted for 98.8% of discretionary ISAs.
The number of ISA account holders increased steadily across all age groups. In particular, the share of people in their 20s and 30s rose after the introduction of brokerage-type ISAs, increasing from 32.8% at the end of 2020 to 41.1% at the end of last month. The proportions choosing brokerage-type ISAs were 95.1% among those in their 20s and 30s, 91.2% among those in their 40s and 81.9% among those aged 50 and older.
By gender, among people in their 20s and 30s, there were 2.11 million men and 2.02 million women. Among those aged 50 and older, there were 2.02 million women and 1.66 million men.
An ISA is a tax-advantaged account that allows investors to pool various financial products, including domestic stocks, funds, ETFs, deposits and installment savings, in a single account for diversified investment. After a specified period has elapsed, gains and losses across the financial products in the account are offset, and net profits of up to 2 million won for general-type accounts and 4 million won for low-income-type accounts are tax-exempt. Amounts exceeding those limits receive separate taxation at 9.9%, while tax deferral until the account is closed can provide additional compounding benefits.
Jae Young Han, head of the K Capital Market Division at the Korea Financial Investment Association, said, "The number of ISA account holders surpassing 10 million demonstrates that the ISA has established itself as the nation's personal wealth-management account. Alongside the Productive Finance ISA to be introduced soon, it is expected to support people's wealth accumulation while creating a virtuous cycle that channels funds from the broader market into the domestic capital market."

[email protected] Minji Seo Reporter